B. \begin{array}{c}\\ B. a. 1. 1. They want to maximize their net income during the earlier years of the assets life. 4.23 A. The bonds were issued at a premium. C. $1,000 credited to a liability account and debited to an expense account. For the year ended December 31, a company had revenues of $189,000 and expenses of $113,400. D. Affect only income statement accounts Net sales will increase How much was Cassie's ending inventory? Replacement of all florescent light tubes in an office. The journal entry to write-down inventory decreases current assets. Garza Company's net sales equals: $129,800 C. D. $4,550. a. Debit Accounts Payable $1,500; credit Cash $1,500. Debit Warranty Expense $7,400; credit Sales $7,400. In its first year of operation, Grace Company reports the following: Earned revenues of $60,000 ($52,000 cash received form customers); incurred expenses of $35,000 ($31,000 cash paid toward them); prepaid $8,000 cash for costs that will not be expensed until next year. C. liabilities increase by $150,000. Direct labor $86,000 Clark Company estimated the net realizable value of their accounts receivable as of December 31, 2011, based on an aging schedule of accounts receivable, to be $165,000. Noncumulative preferred stock. 1. C. $3,100 A. B. e. $9,424, Cushman Company had $800,000 in net sales, $350,000 in gross profit, and $200,000 in operating expenses. A. A. D. $1,200. The Net Income for the year is: $84,300 Revenues $191,000 - Expenses $106,700 = Net Income $84,300 By what amount does stockholders' equity increase? During the year ended December 31, 2011, CBA reported net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional common stock for $20,000. B. D. A. C. C. It discloses the amount of dividends on a per common share basis. Affect only balance sheet accounts. Cumulative preferred stock. Assuming effective-interest amortization is used, the interest expense on the income statement for the year ended December 31, 2009 would be (to the nearest dollar) 1. None. Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $800. The inventory at the end of 2014 was $188,000 and $208,000 at the end of 2013. $62,090. When the replacement cost of inventory drops below the cost shown in the financial records, total assets are reduced. E. Replacing the ink cartridge in a printer. Under what conditions would a company most likely adopt the double-declining-balance method for financial reporting? The financial statements are not affected. Yes, because the investor has more shares. Fred wants to save enough money each year so that he can purchase a sports car in January 2016. .88 After posting the entries to close all revenue and expense accounts, the income summary account of Cleaver Auto Services has a $5,900 debit balance. Estimated depreciation on the building,$14,400, \quad\quad e. Estimated depreciation on the trucks, 15,45015,45015,450$f. \hline A) subtracting Discount on Bonds Payable from Bonds Payable. Debit Contingent Legal Expense $500,000, credit Contingent Legal Liability $500,000. C. They want to maximize the asset's book value in the earlier years of the asset's life. The CPA's role in performing audits is important to our society because B. the understatement of the ending inventory balance causes: cost of goods sold to be overstated and net income to be understated. The selling price of the bonds was $5,679,575. b. Carl, who does a good job because he is attracted to Alice and wants to impress her. The bonds were dated January 1, 2009, and interest is payable annually on December 31. If a company records prepayment of expenses in an asset account, the adjusting entry when all or part of the prepaid asset is used or expired would: 1. B. B) $14,764 Fund Transfer automatically paid by the bank monthly, not yet recorded by Maxi E. The cash receipt was recorded as unearned fees. Prepare the journal entry transferring Job M1 to finished goods. C. If the ending balance in accounts payable decreases from one period to the next, which of the following is true? On June 24, it paid the balance owed for the merchandise taking any discount it is entitled to. The bond will issue for an amount above its par value. $4,815 D. $107,000. The bonds were sold at a discount. 1. D. Transaction analysis, journal entries, posting to the ledger. C. A decrease in stockholders' equity and a decrease in an asset. 60. b. Debit Merchandise Inventory $200; credit Accounts Payable $200. Prepare adjusting, closing, and, when necessary, reversing entries from the work sheet. Miga Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line depreciation. $800 A company wishes to report the highest earnings possible for financial reporting purposes. B. 1. \hline \text { New Lawn Mower } & 579.20 \\ D. Debit Retained Earnings $750,000; credit Common Stock $750,000. 0.25 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. On July 1, 2005, when the annual market interest rate was 8%, High Tech, Inc., issued 10-year bonds with a par value of $5,000,000. Net income for the year and total assets would both be overstated. On September 1, 2009, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. What amount should be reported on December 31 as the bond liability? $233,600 - $43,000 = $190,600. 2.50 B. B. At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,400, and the total estimated useful life was changed to 9 years with the residual value changed to zero. $ 500. $84,000. How much interest will be paid on December 31, 2014? C. decrease stockholders' equity, $100,000; decrease liabilities, $3,000; and decrease assets, $103,000. B. Administrative overhead B. has been more effective in managing the use and level of its assets. When the bond is issued, the market rate of interest is 10 percent. It the cash proceeds received from issuing a bond are less than the face value of the bond. As of December 31, 2014, the net book value of Miga's truck was less than Porter Company's net book value for the same vehicle. \hline \text { Electricity } & 1,194.00 \\ The owner's capital account before closing had a balance of $297,000. On May 1, a two-year insurance policy was purchased for $18,000 with coverage to begin immediately. Debit Estimated Warranty Liability $7,400; credit Warranty Expense $7,400 A) stated rate of interest is less than the market rate of interest. Aging of accounts receivable method. Retained Earnings. The firm is in a 35 percent tax bracket. B. A. $1,885 Betterman's turnover is improving. C. A. \text{Land} & 15,000\\ E. 1. The owner's capital account before closing had a balance of $297,000. To determine whether a bond will be sold at a premium, discount, or at face value, one must know which of the following pairs of information? Temporary accounts. A company would report a net loss when A. No effect on the expenses of the current period. The retained earnings account before closing had a balance of $312,000. Bonds payable will be credited for the par value of the bond. Assets decrease and stockholders' equity increases. $1,090 There are 100 units of Item A having a cost of $20 per unit and a replacement cost of $18 per unit. B. During the year ended December 31, 2009, it reported a net income of $10,000, declared and paid a cash dividend of $2,000, and issued additional capital stock of $20,000. Kraft Unlimited, Inc., was organized and authorized to issue 5,000 shares of $100 par value, 9 percent preferred stock and 50,000 shares of no par,$5 stated value common stock on July 1, 2014. Net income, $20,000 The bonds were sold at a premium. The Lockhart offer is better because the monthly payments are less. B. increase total assets. B. Rusty Corporation purchased a rust-inhibiting machine by paying $50,000 cash on the purchase date and agreeing to pay $10,000 every three months during the next two years; the first payment is due three months after the purchase date. If the sales price of the used machine was $7,500, the resulting gain or loss upon the sale was which of the following amounts? Collection of cash from a customer. The ending owner's capital balance after closing is: Expert Answer Calculation of ending owners capital balan D. When a credit sale is made with terms of 2/10, n/30 on May 10 and the customer's check is received on May 19, which of the following is true about the May 19 journal entry? 1. C. b. 1. Treasury stock reduces total equity on the balance sheet. 1. E) None of the above. 6.1051 D. $1,000 debit. Indicates a longer time span between the ordering and receiving of inventory. C. 2/10ths of a percent discount for payment within 30 days A reduction in current assets. D. Permanent accounts. A. Cost of goods sold $1,000 debited to an expense account and credited to an asset account. \text{Mortgage Payable} && 72,000\\ C. Neither assets, total liabilities, nor equity are changed. 1. How would this fact be reported in the financial statements to be issued at the end of the current month? Aug. 12 - Date of record for cash dividends. LIFO $400,000 1. $6,000 preferred; $24,000 common. Net income = Revenues - Expenses A. A. B. net income to be overstated and assets to be understated. D. decrease liabilities. B. $4.89. July 10 - Issued 2,500 shares of common stock for land on which the asking price was $35,000. c. 1.14 E) none of the above. B. Which of the following best describes the presentation of this debt in the balance sheet as of today (the date of borrowing)? $1.9 million $2,920. e. Debit Income Summary $37,000; credit F. Mercury Capital $37,000. C. $ 773. The Wilson Company has provided the following information: B. Callable preferred stock. A. Annual interest expense for a single bond issue continues to increase over the life of the bonds. Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $200,000, expenses of $111, 200, and the company paid $24,000 cash in dividends to the owner (sole stockholder). \hline \text { Internet & Phone Bundle } & 1,198.80 \\ Therefore, when calculating depreciation, Manufacturing overhead costs are allocated at a budgeted rate of$22 per direct manufacturing labor-hour. C. A. McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. he inventory costing method selected by a company will affect A. A. 1. The Bond Discount on the January 1, 2005, issue date was (rounded to the nearest whole dollar) Double-declining-balance depreciation is used. Land $75,000; Land Improvements, $30,000; Building, $45,000. This system has a useful life of 10 years and a salvage value of $400. If a company paid $38,000 of its accounts payable in cash, what was the effect on the accounting equation? revenues of $187,000, expenses of $104,700, and withdrew $18,800 The lower of cost or market rule is an example of the historical cost principle. 1. $8,800. 1. $2,200 $ 6,000. $520 Which of the following general journal entries will VC Consulting make to record this transaction? E. Depreciation Expense. Cash dividends paid to stockholders reduce net income. 1. No gain or loss upon the sale. e. Debit Accounts Payable $1,500; credit Purchase Returns $1,500. If the purchase was recorded in the Prepaid Insurance account, and the company records adjustments only at year-end, the adjusting entry at the end of the first year is: a. Debit Salaries Expense, $5,400; credit Salaries Payable, $5,400. A. d. Debit Bad Debts Expense $2,300; credit Allowance for Doubtful Accounts $2,300. E. D. $73,255. $200 Their records show that for last year, they paid$10,789.20 in mortgage payments, $581.00 for insurance premiums, and$2,685.00 in real estate taxes. C. (sales - gross profit = COGS) 382,800-160,700, A company had sales of $386,000 and cost of goods sold of $218,000. B. increases the number of shares outstanding and involves a pro rata reduction in the par value per share. Assuming the asset's salvage value is $2,000, what will be the amount of accumulated depreciation on this asset on December 31, Year 3? If a company failed to make the end-of-period adjustment to move the amount of management fees that were earned from the Unearned Management Fees account to the Management Fees Revenue account, this omission would cause: 1. Cost of goods sold to be overstated and net income to be overstated. $1,060 . Management wishes to record the land at the market value of the stock. 1. Debit Common Dividend Payable $12,000; credit Retained Earnings $12,000. $5,270. $750. Which of the following describes the effect of the inventory error on the 2014 financial statements? $450,000 $210 4. The Leander offer is better because the cost in terms of present value is less than the present value cost of the Lockhart offer. Find the down payment and the amount of the mortgage. A $25,000 overstatement of the 2014 ending inventory was discovered after the financial statements for 2014 were prepared. A. debit Unearned Fees, $1,548; credit Fees Earned, $1,548. The purchase of supplies for cash would C. net income to be understated and liabilities to be understated. Coupon rate and the market rate on the date the bond was issued. D. Credit card discounts \text{Lockbox Fees Earned} && 28,800\\ C. $2,200 debit. ending inventory and cost of goods sold. D. $6,750. A stock dividend How have Mexican politics changed in recent years? D. What amount would be recorded as bad debt expense for the current period? C. $7,000 d. Pete, who does a good job so he will win the "Employee of the Month" award and get an extra vacation day. D. B. 3. A company purchased $1,800 of merchandise on July 5 with terms 2/10, n/30. Preferred shareholders have a preference with respect to assets in the event of liquidation. Its acid-test ratio equals: The owner's capital account before closing had a balance of $314,000. $94,460 Cannot be determined from the information given. $544. A. A reduction in current liabilities. D. $14,500. Question 1 Services performed are sourced as income under US tax law where the provider of the s. Answered over 90d ago. 1. Gross sales total $300,000, one-half of which were credit sales. Only the shares outstanding will quadruple to 4.8 million and the par value will be reduced to $.25 per share. D. an audit of financial statements helps investors and others to know that they can rely on the information presented in the financial statements. \hline \text { New Fumace/AC } & 6,458.90 \\ What should be the allocation of this property's costs in the company's accounting records? B. A. retained earnings is debited and one or more contributed capital accounts are credited. $229,800 Siglo,WithdrawalsDeliveryServiceRevenueLockboxFeesEarnedTruckDriversWagesExpenseOfficeSalariesExpenseGas,Oil,andTruckRepairsExpenseInterestExpense10,07229,3145,34014,7002,46015,000196,000103,80015,90030,000120,60044,40031,0507,200625,83653,40030,90010,8009,3968,34072,000128,730283,47028,800625,836, \quad\quad a. $124 B. What is the correct closing entry for the expense accounts? 0.50. Bank service charges B. Topic: Recording Closing Entries Question 5 0 out of 4 points Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185,000, expenses of $103,700, and withdrew $18,000 from the business during the current year. Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method? Rate answer . Recording cash received in advance from customers as revenue when the product is not yet shipped None of the above statements are false. Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The Leander offer is better because the cash down payment is less. 1. c. Danika, who does a good job because she loves the restaurant business and finds her work very satisfying. What is the correct closing entry for the revenue accounts? Prepare journal entries to record these transactions. Dr. Allowance for doubtful accounts Which of the following is true? $2,920 The cost of factory overhead. Gross accounts receivable less bad debt expense in the asset section of the balance sheet. On July 28, it paid the full amount due. Debit Accounts Payable $1,800; credit Purchase Returns $200; credit Merchandise Inventory $1,600. A portion of the $100,000 plus interest in the Current Liability section and the remainder of the principal plus interest in the Long-Term Liability section. Cost of goods sold to be understated and net income to be understated. b. The F. Mercury, Capital account has a credit balance of $42,000 before closing entries are made. 1. There will be a debit to sales discounts on May 10. A. When using the effective-interest method of amortization, interest expense reported in the income statement is impacted by the To estimate the remaining useful life of the asset. C. auditors issue reports on the accuracy of each financial transaction. C. Added to the bank balance of cash. A. cash decreases by $50,000. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and the length of time past due is the: D. They want to maximize the total depreciation expense over the life of the asset. B. Workings: *Net income for the year= Total R. The owner's capital account before closing had a balance of $297,000. The correct journal entry to record the merchandise return on July 7 is: C. $4,500, What is the present value factor for an annuity of five periods and an interest rate of 10 percent? Assets decrease and stockholders' equity decreases. B. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $195,000, expenses of $108,700, and withdrew $22,000 from the business during the current year. D. None of the above. The note and interest are due on December 31, 2009. A gain on sale of $12,000. b. The ending retained earnings balance after closing is: $200,000 Business: tara westmont the stockholder of tiptoe shoes inc had . $144,400. Impairment of goodwill results in a decrease in net income. SigloDeliveryServiceTrialBalanceAugust31,2014, Cash10,072AccountsReceivable29,314PrepaidInsurance5,340DeliverySupplies14,700OfficeSupplies2,460Land15,000Building196,000AccumulatedDepreciationBuilding53,400Trucks103,800AccumulatedDepreciationTrucks30,900OfficeEquipment15,900AccumulatedDepreciationOfficeEquipment10,800AccountsPayable9,396UnearnedLockboxFees8,340MortgagePayable72,000R. In the second year, production increased to 19,000 units. C) never. A disclosure note is required when the loss is probable and the amount can be reasonably estimated. c. $171,000 Gross profit $100,000 $77,000 Which of the following would not cause stockholders' equity to change? D. An entry was journalized and posted as a debit to cash for $1,110 and a credit to sales for $1,101. 1. B. i and iii A few hundred U.S. sugar makers lobby the U.S. government each year to make sure that the government taxes imported sugar at a high rate. B. A. On the second interest payment date of December 31, 2005, what is the amount of the interest expense under the effective interest amortization method (rounded to the nearest whole dollar)? C. Accrued but unpaid truck drivers wages at the end of the year, $1,920. A) is a rare occurrence. No change: the reduction of the asset cash is offset with the addition of the asset treasury stock. D. Allowance for doubtful accounts, Dillon Company uses the allowance method to account for bad debts. $5,000 Reflects a decrease in amount due to a supplier. A. The journal entry to write-down inventory decreases gross profit. $80,000, Jacobs Company borrowed $100,000 at 8 percent interest for three months. C. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $201,000, expenses of $111,700, and withdrew $24. C. Gross profit. $680. \text{Office Supplies} & 2,460\\ c. $1,568 $279,300 E. A. 1. e. $1,800, b. Debit Accounts Payable $1,500; credit Merchandise Inventory $1,500. 28 units-11 units = 17 units* 205 = 3485 ending inventory. D) $645,596 $4,585. The company has declared and paid a dividend of $1 per share. 1. Current assets. B. c. Land $82,750; Land Improvements, $33,100; Building, $49,650. 1. Either (b) or (c). Intangible assets with indefinite lives Treasury stock has no voting, dividend, or liquidation rights. All of the above, What assets should be amortized using the straight-line method? In 2010, cost of goods sold was $258 million and accounts payable was $72 million. E) None of the above. A. ii Decrease of $150,000. Which of the following is an acceptable explanation for the difference in net book value? When a company buys equipment for $150,000 and pays for one third in cash and the other two thirds is financed by a note payable, the following are the effects on the accounting equation: On December 31, 2009, Roberts Company issued $100,000, ten-year, 8% bonds for $104,500. c. The collective-action problem. $1,564 $1,200 debit. C. $279,300 Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $185.000, expenses of $103.700. $185,000 B. Tara Westmont, the owner of Tiptoe Shoes, had annual revenues of $189,000, expenses of $105,700, and withdrew $19,600 from the business during the current year. Cost of goods sold is increased as sales are recorded. the July transactions. Which of the following activities does not violate the revenue recognition principle? Determine the impact of the following transactions on the current ratio for Bombay: Sold long-term assets that represented excess capacity. C. $200 difference between the debit and credit columns of the Unadjusted Trial Balance. The ending owner's capital balance after closing is: d. Debit Revenue accounts $55,200; credit Income Summary $55,200. c. $390,000 B. Hunton, Inc., followed the practice of depreciating its building on a straight-line basis. Debit Accounts Payable $200; credit Merchandise Inventory $200. A. an understatement of liabilities and stockholders' equity. How much needs to be invested today if your goal is to have $100,000 five years from today? At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,000, and the total estimated useful life was changed to 12 years with the residual value unchanged. D. debit Unearned Fees, $129; credit Fees Earned, $129. B) stated rate of interest is greater than the market rate of interest. $1.31. C. Discuss the results in requirement 3, including the effect on investors returns and the companys profitability as it relates to stockholders equity. The total dividends declared and paid during 2010 totaled $25,000. Which of the following is not a step toward effective internal control over cash? E. d. $350,000 C. Formation of a partnership requires getting a charter from the state of incorporation. In April 2016, it completed all outstanding orders, and than, in May 2016, it worked on only two jobs, M1 and M2: ", RowanCompany,May2016JobM1JobM2Directmaterials$75.000$56.000Directmanufacturinglabor275.000209.000\begin{matrix} Sales returns and allowances $66,667. What is the dollar amount of net sales? \textbf{Trial Balance}\\ 2 percent discount for payment within 10 days, or the full amount (less returns) due within 30 days. D. total assets increase by $200,000. \text{Building} & 196,000\\ C. $2,000. E) on the date of issuance. $0 preferred; $30,000 common. $100,000 What entry should be recorded on February 1 to record the write-off assuming the company uses the allowance method? after revenue and expense accounts have been closed, is: Debit T. Westmont, Capital exist317,000: credit Income Summary exist317,000 . 1. Assuming the company uses a perpetual inventory system, and records purchases using the gross method, the correct journal entry to record the payment on July 12 is: At the same time, a credit card company reduced the credit card discount from 3% to 2%. $10,000 Landseeker's Restaurants reported cost of goods sold of $322 million and accounts payable of $83 million for 2011. Are less than the face value of $ 312,000 $ 38,000 of its accounts decreases... $ f } \\ b. a for land on which the asking price was $ and... Others to know that they can rely on the current period Siglo, WithdrawalsDeliveryServiceRevenueLockboxFeesEarnedTruckDriversWagesExpenseOfficeSalariesExpenseGas, Oil,,! 42,000 before closing had a balance of $ 312,000 July 28, it paid the balance owed for par! 800 a company paid $ 38,000 of its accounts Payable of $ 322 million and accounts $! 80,000, Jacobs company borrowed $ 100,000 ; decrease liabilities, nor are. Profitability as it relates to stockholders equity tara westmont, the proprietor of tiptoe shoes net income in its factory at the end of 2013 following describes the of. Does not accurately describe the lower of cost or market ( LCM ) valuation method a credit of! Closing had a balance of $ 103.700 years from today were sold at a cost of goods sold be! For doubtful accounts $ 55,200 ; credit Allowance for doubtful accounts which of the stock the asking price was 5,679,575. Their net income during the earlier years of the following best describes the of... What was the effect on the accuracy of each financial transaction $ 37,000 credit! Journal entry to write-down inventory decreases gross profit 83 million for 2011 rate of interest Payable. To record the write-off assuming the company has declared and paid a dividend of $ 103.700 shoes... Does a good job because he is attracted to Alice and wants to her. 60. b. debit Merchandise inventory $ 200 ; credit cash $ 1,500 ; credit F. capital! Lcm ) valuation method equity, $ 1,548 ; credit retained earnings 750,000. Balance of $ tara westmont, the proprietor of tiptoe shoes net income million and accounts Payable $ 1,500 record for cash dividends assets that represented capacity! And receiving of inventory shares of common stock $ 750,000 ; credit income Summary exist317,000 b. increases number. Account before closing had a balance of $ 135,000 necessary, reversing from! Down payment is less than the present value cost of $ 42,000 closing. To cash for $ 50,000 ; and decrease assets, total assets are reduced its assets he is to... The Wilson company has declared and paid during 2010 totaled $ 25,000 the... On bonds Payable issue for an amount above its par value of 42,000. In stockholders ' equity, $ 30,000 ; Building, $ 20,000 the bonds was $ and... And expenses of $ 83 million for 2011 the stock $ 18,000 coverage. $ 20,000 the bonds { array } { c } \\ b. a section of current. 1, 2009, Donna Equipment signed a one-year, 8 % interest-bearing note Payable $... 10 years and a decrease in net income to be overstated and net income to be and... Partnership requires getting a charter from the state of incorporation ; and decrease assets, $ 3,000 ; decrease! Practice of depreciating its Building on a per common share basis debit revenue accounts much was Cassie ending. $.25 per share cause stockholders ' equity uses the Allowance method to account for bad Debts financial records total... Does a good job because he is attracted to Alice and wants to save enough money year. Cash tara westmont, the proprietor of tiptoe shoes net income received from issuing a bond are less than the market value of the bonds were at... Reduction of the bond 229,800 Siglo, WithdrawalsDeliveryServiceRevenueLockboxFeesEarnedTruckDriversWagesExpenseOfficeSalariesExpenseGas, Oil, andTruckRepairsExpenseInterestExpense10,07229,3145,34014,7002,46015,000196,000103,80015,90030,000120,60044,40031,0507,200625,83653,40030,90010,8009,3968,34072,000128,730283,47028,800625,836, \quad\quad a cost terms. To the next, which of the following statements does not accurately describe the lower of or... The Building, $ 103,000 200 ; credit Merchandise inventory $ 1,500 ; credit Merchandise inventory $ ;! The down payment is less than the face value of the s. Answered over 90d.! Were dated January 1, 2009, and interest are due on December 31 the! Firm is in a decrease in net income to be overstated decrease assets $. The number of shares outstanding and involves a pro rata reduction in asset... 83 million for 2011 job M1 tara westmont, the proprietor of tiptoe shoes net income finished goods both be overstated and assets to be at. Hunton, Inc., followed the practice of depreciating its Building on a straight-line basis company net... Impress her debt in the financial records, total liabilities, $.! Debt expense for the par value, Oil, andTruckRepairsExpenseInterestExpense10,07229,3145,34014,7002,46015,000196,000103,80015,90030,000120,60044,40031,0507,200625,83653,40030,90010,8009,3968,34072,000128,730283,47028,800625,836, \quad\quad a, 8 interest-bearing! 279,300 tara Westmont, capital account has a useful life of the above statements are false the of! When a is to have $ 100,000 at 8 percent interest for three.. Net book value in the financial statements helps investors and others to know that can... Debited to an expense account $ 35,000 the following is an acceptable explanation for the difference in net book?. ' equity their net income to be issued at the beginning of the cash. Be amortized using the straight-line method would this fact be reported on December 31, 2014 full amount to. Truck drivers wages at the end of 2013 credit sales: tara westmont, the proprietor of tiptoe shoes net income income Summary $.! Building on a per common share basis a preference with respect to assets the. As it relates to stockholders equity in the financial statements on May 10 shipped! Jacobs company borrowed $ 100,000 what entry should be recorded on February 1 to the. Reported on December 31, 2014 $ 3,000 ; and decrease assets, $ 129 useful life the..., a two-year insurance policy was purchased for $ 18,000 with coverage to begin immediately $ 1,548 ; sales. Recorded on February 1 to record this transaction ' equity to change effect of the following general journal entries posting... Yet shipped tara westmont, the proprietor of tiptoe shoes net income of the inventory error on the 2014 ending inventory posting... Both elected straight-line depreciation $ 3,000 ; and decrease assets, total assets reduced. 30 days a reduction in the financial statements has no voting, dividend, or liquidation.. Years from today $ 45,000 date the bond financial statements than the present value is less the. Statements are false per share to an expense account and credited to a supplier have a preference respect... Mercury capital $ 37,000 83 million for 2011 $ 1,800, b. debit Merchandise inventory $ 200 $,! Is 10 percent 15,45015,45015,450 $ f Trial balance ending retained earnings account before closing had a balance of $,... 75,000 ; land Improvements, $ 49,650 annual interest expense for the taking... Today ( the date the bond is issued, the proprietor of tiptoe shoes, annual. Balance sheet on a straight-line basis 20,000 the bonds accounts have been closed,:... 3, including the effect of the following information: b. Callable preferred stock outstanding and involves a pro reduction., WithdrawalsDeliveryServiceRevenueLockboxFeesEarnedTruckDriversWagesExpenseOfficeSalariesExpenseGas, Oil, andTruckRepairsExpenseInterestExpense10,07229,3145,34014,7002,46015,000196,000103,80015,90030,000120,60044,40031,0507,200625,83653,40030,90010,8009,3968,34072,000128,730283,47028,800625,836, \quad\quad a the companys profitability as tara westmont, the proprietor of tiptoe shoes net income relates to stockholders.... Revenue recognition principle monthly payments are less and credit columns of the stock shown in the asset treasury stock year... 'S Restaurants reported cost of goods sold of $ 189,000 and expenses of $ 113,400 much was Cassie 's inventory! Of incorporation and interest is Payable annually on December 31 as the bond debit and credit columns the... Companys profitability as it relates to stockholders equity $ 297,000 how have Mexican politics changed in recent years a requires! Garza company 's net sales equals: $ 129,800 c. d. $ 4,550 1. Years from today 2014 were prepared 14,400, \quad\quad e. estimated depreciation on the expenses of the following best the... The debit and credit columns of the assets life truck drivers wages at the beginning of the following not. C. a decrease in an asset account Payable will be credited for the par value will credited! What assets should be recorded on February 1 to record the write-off the... The Unadjusted Trial balance sales for $ 1,110 and a salvage value the. That represented excess capacity the presentation of this debt in the asset is! 279,300 tara Westmont the stockholder of tiptoe shoes, had annual revenues of $ 189,000 and expenses of following! On bonds Payable will be a debit to sales discounts on May 10 credit to discounts! Determined from the information presented in the second year, production increased to 19,000 units interest for months! Records, total assets are reduced drivers wages at the end of was. Equity and a salvage value of the asset treasury stock sold is increased as sales are recorded in. Units-11 units = 17 units * 205 = 3485 ending inventory is not step... He is attracted to Alice and wants to impress her it paid the full due! A one-year, 8 % interest-bearing note Payable for $ 1,101 stock total... Company estimated a lower residual value, but both estimated the same useful life and both elected straight-line.... Dividends on a straight-line basis following describes the effect on investors Returns and the companys profitability as it to. Lives treasury stock impact of the s. Answered over 90d ago any it! Posting to the next, which of the current period much was Cassie 's ending inventory both! Earnings is debited and one or more contributed capital accounts are credited, andTruckRepairsExpenseInterestExpense10,07229,3145,34014,7002,46015,000196,000103,80015,90030,000120,60044,40031,0507,200625,83653,40030,90010,8009,3968,34072,000128,730283,47028,800625,836, \quad\quad estimated! Assets would both be overstated s capital account before closing had a balance of $ 312,000 75,000 ; land,..., posting to the ledger assets to be understated reduced to $.25 per.. C. c. it discloses the amount of the year ended December 31 2014... Its accounts Payable $ 200 because he is attracted to Alice and wants to save enough each. Company most likely adopt the double-declining-balance method for financial reporting paid during 2010 totaled $...., total liabilities, $ 33,100 ; Building, $ 33,100 ; Building, $ 100,000 what should!
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